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Quality Upgrading, Skill Demand and International Trade: The Case of German Manufacturing

  • Elisabeth Kutschka

    ()

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

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    The present paper contributes to the ongoing debate about how international trade can affect the demand for skills in industrial countries by estimating the impact of quality competition on the relative demand for low skilled workers in German manufacturing between 1995 and 2004. Results reveal a statistically significant negative effect albeit relatively small in size with quality competition accounting for approximately 5% of the overall decline in low skilled workers' wage bill share. This effect entirely stems from quality competition with other advanced countries. The influence of trade in different qualities with newly industrializing economies is negligible.

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    File URL: http://www.fww.ovgu.de/fww_media/femm/femm_2011/2011_22.pdf
    File Function: First version, 2011
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    Paper provided by Otto-von-Guericke University Magdeburg, Faculty of Economics and Management in its series FEMM Working Papers with number 110022.

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    Length: 29 pages
    Date of creation: Oct 2011
    Date of revision:
    Handle: RePEc:mag:wpaper:110022
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    15. Danièle Meulders & François Rycx & Robert Plasman, 2004. "Minimum Wages, low pay and unemployment: introduction," ULB Institutional Repository 2013/7704, ULB -- Universite Libre de Bruxelles.
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